I very recently was let go from my job. I have an outstanding loan from my 401K which I used to purchase my primary residence. As I understand it, upon termination the loan must be repaid or it becomes ordinary income and is taxed accordingly. I'm not sure if I am charged a withdrawal penalty or not.
I am 56 years old. Are there any options or programs available to avoid the re-payment requirement or something to help me mitigate the tax and penalty hit I will realize.

Generally you are correct, in that if you leave your job the outstanding loan gets reclassified as a withdrawal. You do have an option of paying back the outstanding amount within 60 days of your termination. But other than that there's not much you can do to avoid being taxed on the "withdrawal." You will owe ordinary income tax on this amount - and depending on what state you live in you may owe state income tax on it as well. If you were subject to the 10% early withdrawal penalty you woul have to pay that as well, but in your case, because you were "separated from service" in or after the year you reached age 55, you do not owe the early withdrawal penalty. Hurray for small favors.